Athens stock market plummets plummet on Greek Syriza election win

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Emma Haslett

Greek voters celebrate Syriza's election victory (Source: Getty)

Stocks in Athens opened lower this morning, as the results of the Greek election began to sink in for investors.

The Athens Stock Exchange fell 3.2 per cent, while other European markets largely shrugged off the result. The FTSE 100 was down 0.31 per cent in early trading, while Germany's Dax edged up 0.35 per cent and France's Cac 40 pulled itself up 0.02 per cent.

However, Greek banks were hit hard, with shares in Piraeus Bank falling 12 per cent, Alpha Bank dropping 11 per cent and Eurobank Ergasias dropping 9.2 per cent. National Bank of Greece lost 8.9 per cent.

Having fallen to an 11-year low against the dollar, to $1.1143 overnight, the euro regained some of its losses, hitting $1.1233. Against the pound, it rose to 74.82p.

In the run-up to the election, investors voiced concerns a definitive win by anti-austerity party Syriza could lead to a Greek exit from the Eurozone.

Today Societe Generale analyst Kit Juckes said a "Grexit" would be "unambiguously bad for the euro".

No surprise... that having made a new low in Asia overnight, we have seen a modest bounce in EUR/USD. It isn't a big enough bounce, however, to answer any questions about how fast the fall in EUR/UDSD towards parity can be, given the lopsided positioning.

But despite promises by Syriza leader Alexis Tsipras to eliminate Greece's debt obligations to the so-called Troika - the European Union, International Monetary Fund and European Central Bank - by whatever means necessary, analysts suggested there's wide consensus between EU members that the country should remain inside the Eurozone.

In a note this morning, UBS pointed to "an agreement between Syriza and the euro area countries that Greece should stay in the euro". However, it added:

The Eurogroup extended the deadline of its final Troika review to end-February, while the IMF programme runs until Q1 2016. Talks are going to be scrutinized by both creditor and past/current bail-out countries, as a too-lenient compromise towards Greece or a harsh solution (break-up of talks and potential Greek exit) could have serious repercussions for Europe.